2 - MA Call - FCA - PSA - 18dec2019

Fiat Chrysler Automobiles N.V.
BIT:FCA
M&A Call
Wednesday, December 18, 2019 2:00 PM GMT
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Contents
Table of Contents
Call Participants .................................................................................. 3
Presentation .................................................................................. 4
Question and Answer .................................................................................. 9
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FIAT CHRYSLER AUTOMOBILES N.V. M&A CALL | DEC 18, 2019
Call Participants
EXECUTIVES
Carlos Tavares
Chairman of the Managing Board
Peugeot S.A.
Joseph Veltri
Vice-President of Investor
Relations
Michael M. Manley
CEO & Executive Director
ANALYSTS
Adam Michael Jonas

Morgan Stanley, Research Division
Gaetan Toulemonde
Deutsche Bank AG, Research
Division Thomas Besson
Kepler Cheuvreux, Research
John Joseph Murphy Division
BofA Merrill Lynch, Research
Division
José Maria Asumendi

JP Morgan Chase & Co, Research
Division
Kai Alexander Mueller

BofA Merrill Lynch, Research
Division
Max Eliot Adair Warburton

Sanford C. Bernstein & Co., LLC.,
Research Division
Patrick Hummel
UBS Investment Bank, Research
Division
Stephen Michael Reitman

Societe Generale Cross Asset
Research
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Presentation
Operator
Good afternoon, ladies and gentlemen, and welcome to today's joint Fiat Chrysler Automobiles and Groupe
PSA Webcast and Conference Call. For your information, today's conference is being recorded.
At this time, I would like to turn the call over to Joe Veltri, Head of FCA Global Investor Relations. Mr.
Veltri, please go ahead, sir.
Joseph Veltri
Vice-President of Investor Relations
Thank you, Alecio, and welcome to everyone joining us today for this historic event. Earlier today, PSA
and FCA jointly announced that the 2 companies have entered into a binding combination agreement for
a proposed 50-50 merger. Today's call will focus on that proposed transaction and will be hosted by PSA's
Chief Executive Officer, Carlos Tavares; and FCA's Chief Financial Officer (sic) [ Chief Executive Officer ],
Mike Manley. Also present today are Richard Palmer, FCA's Chief Financial Officer; Philippe de Rovira, PSA's
Chief Financial Officer; and Andrea Bandinelli, PSA's Head of Investor Relations.
The presentation material for today's call has been posted on both the FCA Group website and the Groupe
PSA website. After their presentations, both Mike and Carlos will be available to answer questions from the
sell-side analysts. [Operator Instructions]
Before we begin, I just want to point out that any forward-looking statements made during today's call are
subject to the risks and uncertainties mentioned in the safe harbor statement, which is included on page 3
of today's presentation. This also includes the risk that the agreed transaction discussed during today's call
remains subject to customary closing conditions as well as other risks and uncertainties associated with
the execution of the proposed transaction, and as customary, the call will be governed by that language.
So with that, I'm going to turn the call over to Carlos Tavares.
Carlos Tavares
Good afternoon, ladies and gentlemen. Welcome to this call. As you know by now, the FCA Board and the
PSA Supervisory Board have unanimously approved the merger of FCA and PSA. Both Mike and I, we are
proud to make this announcement on behalf of our companies.
This is the result of a very intense work in terms of preparing for this merger. Extensive due diligence have
been implemented. And we are not only proud but also very excited about creating this new company that
is going to deliver a leader for a new era in sustainable mobility.
I would like to thank -- to take this opportunity to express my sincere and warm thanks to our teams,
to the cross-company teams that have been working so hard over the last few months to create this
opportunity for both FCA and PSA. I would like also to thank our union leaders, our union partners who
have supported this merger in a very clear and very aligned way. Of course, I would like also to thank
our shareholders for the trust that they are demonstrating in giving us the opportunity to create this new
company. This is a big, big opportunity for all of us, as we clearly understand that the 2 companies are
complementary. They are complementary in geography. They are complementary in technology. They have
a very strong track record in implementing turnaround plans, and I would like to also highlight the fact
that this is a merger between 2 healthy companies. Both companies are highly profitable. Both companies
are doing great things in their different markets. And therefore, we know that what we have to do from
here is to be smart. What we have to do from here is to leverage the strength of both companies to make
a new car company even more competitive, vis-à-vis the challenges that we have ahead and the level of
maturity that these companies have demonstrated in joining forces is very important to understand what
we are looking for. This level of maturity is coming from the fact that both companies had to turn around
themselves, and they now understand clearly that to face the challenges that we have ahead will be better
off by being together than by standing alone.
If we look at those challenges, on the next slide, we can see that not only we have the traditional CO2
challenge, which may be even more stringent in the near future, looking at what the authorities are now
discussing in terms of green deals all over the world, and specifically in Europe. But beyond the CO2
challenge, which is going to be one of the challenges we'll have to face, we also have the cost of mobility.
Clean mobility is, of course, a must, but affordable mobility is what our customers will be expecting from
us. They will be expecting from us safe, clean, and affordable mobility. And this is the dimension in which
this new company will have a lot more competitiveness than the 2 companies standing alone. Of course,
we have many breakthroughs in terms of technology to deliver. And again, combining forces will give us a
much stronger R&D capability, expertise capability, and of course, we also recognize that we have a strong
market divergence. One of the divergences may be between the urban areas and the rural areas, where
the solutions, the mobility solutions that we will have to bring to our customers may be very different. And
again, combining forces will give us a stronger capability to bring the appropriate solutions to our citizens,
and of course, make sure that we protect freedom of mobility, which is a very strong expectations from
the citizens. From here, it's quite clear that when we are going to join forces, we are going to increase
our ability to bring the answers to the citizens. Again, the expectation is simple. It's about sustainable,
meaning clean, safe and affordable mobility, and combining forces will be, of course, a very strong lever to
achieve that.
From here, I want to hand over to Mike for the next themes.
Michael M. Manley
So next slide, please. Thank you, Carlos. Let me add my welcome to everybody. Joe, you didn't realize
this, but at the beginning, you described me as a CFO. And I saw Richard's face. Richard, don't worry, I'm
not the CFO. Just for complete clarity, okay?
So before I start, let me say that I share the same level of enthusiasm, excitement and confidence
expressed by Carlos related to the merger of these 2 great companies. Now with this merger, we're
actually going to execute what has only been theorized many times before, which is smart industry
consolidation. And this allows us to capitalize on significant value creation opportunities as our industry
undergoes, what I think will be very extensive transitions by bringing together the complementary
strengths of our 2 companies. Now both companies are very strong and, as Carlos said, successful today.
And each company brings to the table strengths such as leading profitability; strong presence in Europe,
North America and Latin America; successful execution of recent combinations and obviously a vast
number of technology partnerships.
Now both Carlos and I recognize the challenges that lie ahead, and we see this combination as a perfect
match to tackle them efficiently and effectively. Now by coming together, the strength of one company
will help address the challenges of the other and create significant upside such as having a more balanced
and global footprint that integrates FCA's strong position in North America and Latin America and PSA's in
Europe. Now at the same time, we will optimize our families of platforms and powertrains while leveraging
our scale to be efficient and nimble in the way we invest, develop and deploy new technologies.
So let me put it in more concrete terms. And here on this next slide are some of the benefits from
combining our strengths and core competencies. Together as one, we'll be the fourth largest global OEM
by volume, with robust margins at inception, and that's even before we realize any synergies. Our solid
balance sheet will allow us to continue to invest in our product portfolio, alternative powertrains, emerging
technologies and new mobility solutions, while also allowing us to navigate potential cyclical challenges in
the marketplace.
Now the new group will have a vast and complementary brand portfolio with a robust presence across
all segments from luxury to mass market and from passenger cars to trucks and SUVs. We estimate
annual steady state synergies at around EUR 3.7 billion, and that's without any plant closures, and Carlos
will provide more details later in the presentation. Now both companies have previously gone through
combinations and by virtue of successful execution have come out stronger from each of them. And that's
a point we are very proud of, which has also been a significant contributing factor to the success of the
combinations, is that each company has been able to quickly and effectively integrate diverse cultures and
create international business leaders. Now as a result, we're well prepared to successfully execute this
merger and deliver significant value to all our stakeholders, our employees, our customers and, of course,
our shareholders.
Carlos Tavares
Thank you, Mike. Let's now have a look at the key terms that, by now, you already know. The major
points of the transaction, which deserves to be highlighted, are a merger on a 50-50 basis, holding
in neutral country, the Netherlands; operational headquarters in France, Italy and the U.S. Prior to
completion of the transaction, each company will distribute EUR 1.1 billion of ordinary dividend in 2020
related to fiscal year 2019. FCA will distribute a special dividend of EUR 5.5 billion and Groupe PSA will
distribute its 46% stake in Faurecia. Major shareholders on both sides are supporting the transaction,
and will remain deeply involved in the new company. And here, I want to express my sincere and special
appreciation to the Dongfeng Motor Group, who has been a strategic shareholder of PSA. Within this deal,
at closing, Dongfeng Group will be at 4.5% share as embedded in this agreement.
On the next slide, you can see that the governance structure will strongly contribute to the combined
company performance. The governance agreed between PSA and FCA is clear. John Elkann will be the
Chairman. I will be the Group CEO. The Board will have a majority of independent directors in accordance
with Dutch governance standards. Mike will have a senior executive role, and we will work closely together
to make this happen. We believe that this brings together the best expertise and leadership going forward
and will help ensure that we successfully combine both companies. Stability of the shareholding with a 7-
year standstill and the 3-year lockup are also embedded in this agreement.
And from here, I would like to hand over to Mike for the strength of this combined company.
Michael M. Manley
Thank you, Carlos. So let me give you a perspective of what the combination of these 2 great companies
looks like and provide some color related to the opportunities just outlined by Carlos. The 2 companies
sold 8.7 million vehicles worldwide in 2018 on a combined basis, which, as I mentioned before, would
have made them the -- would have made us the fourth largest automotive manufacturer by volume and
the third largest by revenues.
Now if you look at the financial performance of each company, on this -- on the left-hand side of this page,
it shows a simple aggregation of the key 2018 financial metrics, and the right side gives you some history
of each company's strong profit margins. Now please note all figures shown in the presentation for FCA
exclude Magneti Marelli and for PSA exclude Faurecia, unless otherwise noted. So revenues in 2018 for
PSA and FCA totaled EUR 169 billion, and we had a strong operating profit collectively of EUR 11.2 billion
and a margin of 6.6%. Now I think this level of profitability is a testament to the success both groups have
achieved over the past year. And operational free cash flow for the 2 companies was strong at EUR 7.5
billion in 2018. Now as you can see on the right side, both companies have significantly improved profit
margins over the past 5 years.
So now let me look at the financial position. The new company will have a strong balance sheet, as you
can see, and enhanced financial flexibility, as evidenced by the nearly EUR 14 billion of automotive net
cash and EUR 42 billion of available liquidity. And as I said, this is based on combined figures for each
company at the end, in this instance, of Q2 this year. Now our enhanced financial and liquidity profile puts
us in a position to confidently target an investment-grade credit rating, which is not only important for our
lower cost of debt, but also for the relationships with our suppliers.
Now I'm going to pivot here and start looking at the brands. And I want to highlight the heritage we're
building on. And as Carlos stated at the start of this presentation, we have a great portfolio of brands.
The brands of the 2 companies have been around, in some cases, for more than 120 years. And you can
see Peugeot way back at the beginning, and that was when the Peugeot brand first started producing
automobiles. Now many of these brands, obviously, they will start with national roots. I mean, that's
where brands tend to start, but many of them have migrated onto the global automotive playing field
and have done very well and some remain strong on a local basis. But I think when you think about our
brands and the portfolio, we're going to compete, as this chart shows you, in all vehicle segments as well
as having full market coverage, and thanks to a broad and complementary portfolio of the brands, as
I said, that I think now are very well established. So this obviously presents opportunities for platform
convergence, and we're going to start working on that, and we'll discuss that in more detail later.
Now on a combined basis, approximately 75% of our global sales were evenly split between the passenger
car and the ever-growing utility vehicle segments. The remaining sales are basically even split between
LCVs, MPVs and trucks.
If we move to the next page, we noted earlier that one of the benefits of the merger was that the
combined entity would be more balanced geographically. And if you look at 2018 performance for each
company, this page demonstrates that by combining PSA's strong revenue base in Europe, with FCA's
strong base in North America, the new company will have a balanced exposure to both markets. And as
you know, this will help minimize the impact of any cyclical downturns that may occur in a specific region.
Now as FCA has been discussing for some time, one of the key benefits of a full merger between the 2
OEMs is investment spending efficiency. And on a combined basis and normalized for FCA is unusually low
spending in 2018, which we've discussed on a number of our quarterly calls. FCA and PSA would have
invested a combined total of approximately EUR 15 billion last year. The capital investment synergies we
expect to generate from the merger will allow us to efficiently and effectively develop leading innovative
mobility solutions as well as state of the art technologies for car connectivity, new energy vehicles and,
of course, autonomous driving. Now in addition, this will allow us to free up engineering resources for
innovations on new products and improve our product cost competitiveness because even with our larger
scale, efficiency will remain a key driver for the new company.
With that, I'll hand back to Carlos.

Carlos Tavares
Thank you, Mike. Before I talk about the synergies, I would like to highlight the fact that the synergies
of costs will not come from any plant closures resulting from the transaction. We target at least annual
synergies of EUR 3.7 billion, as Mike stated, at steady rate, with cumulative implementation costs of
approximately EUR 2.8 billion. We have 3 major drivers for these synergies. First driver, which accounts
for 40% is driven by platform and powertrain convergence, optimizing our investments in R&D and
improving manufacturing processes and tooling efficiencies. So that's the first one at 40% of the total
amount. Second one, also at 40%, is about purchasing savings, where we will leverage our larger scale to
improve product costs and gain access to new suppliers, in particularly, electric or high-tech components.
It is very important to link this to what we expressed previously about clean and affordable mobility. Clean
and affordable mobility means that we need to be cost competitive in buying all the electric powertrain
components and batteries. And that means that the volume scale effect coming from the size of the newco
will be paramount to ensure that we deliver the cost competitiveness on the electric components, that
leads to clean and affordable mobility. This is a very important factor, as you may understand. And the
third factor, which accounts for 20% of the total, will be related to multiple areas such as marketing, IT
systems, logistics and administrative efficiencies. So these synergies will have a net cash flow positive
from year one. And we expect from our planning to deliver no less than 80% of the total synergies by year
4. This is where we are today.
And of course, if you move to the next slide, we see that the combined entities will have a capability to
be around 3 million cars per year on a single platform. And this is also very important in terms of cost
competitiveness. Comparing the new company to our peers, we see that 3 million car volume per platform
and per year is a highly competitive ratio. This is absolutely paramount, and this is something that we will
deliver after the closing by making the necessary decisions to converge to a limited number of platforms.
If we move to the next slide, which is about CO2 and the compliance. We have here a very important
matter for the future. We know that currently some regions of the world, starting with Europe, thinking
about making the CO2 objectives more severe, more stringent than what they are today. We have heard
about the Green Deal in Europe, for instance. And that means that possibly we will be requested in 2030
to go beyond the minus 37.5% CO2 emission reduction. If that was to happen and if that was to be set at
around minus 50%, then, of course, the capability of the newco will be paramount for the compliance and
the success of our brand portfolios. This is exactly where we are going to. This is exactly what we are now
framing to make sure that in our ability to electrify profitably the new products, we will leverage the scale
of the company to be cost competitive in batteries, in electric powertrains, make sure that we can bring
not only clean mobility but also affordable mobility at an acceptable profitability rates to the markets in
which we operate.
So this is going to be -- from here and from closing, it is going to be much more than just CO2
compliance. It's going to be a competitive edge for the new company. And I think this is, of course, very
exciting for the future as we master the technology bricks of this electrification.
If we move to the next slide, very important also about innovation and enhancing innovation through
bigger capability to invest in R&D and products. As Mike was mentioning, the combined entity will be able
not only to spend more, but also to reduce the per unit depreciation of all the R&D expenses, and this
is going to be also a factor for cost competitiveness of our sales. We see that FCA has very strong and
very attractive partnerships in terms of autonomous vehicles and also connectivity. And again, PSA has
some other partnerships, and we see that there is a potential here to make things even more competitive
moving forward. So this is something I wanted to share with you.
From here, what are the next steps? What is the current state? As you know, the 2 boards, FCA Board and
the PSA Supervisory Board yesterday approved unanimously this merger. Mike and I are proud and thrilled
to move forward and to get the job done from signing to closing. As you know, there is a significant
number of antitrust and regulatory approvals. We'll make sure that we do this work in a very rigorous and
focused way moving forward. We can expect that this work will need between 12 and 15 months. This is
the lead time to the closing. And from there, we'll start implementing whatever we need to do to get those
synergies and make those synergies real.
So in a nutshell, to conclude this presentation on the next slide, I would like just to remind you that we
will shoot for no less than EUR 3.7 billion of synergies, things that we already identified and that we would
like to improve even further moving in the future. Of course, efficiency and effectiveness will be at the
core of our strategy. We need to recognize that we are already among the most profitable automotive
companies in 3 different geographies, meaning Europe, North America and Latin America. We want to
continue to better tackle the challenges. Thanks to a larger size for the sake of profitability and never
for the sake of volumes. And we'll have the size to provide cutting-edge technology. So I'm extremely
positive about what we are announcing today. Of course, it's not going to be easy. Of course, it's going to
be thrilling, exciting. We like challenges. We understand that this new company will be competitive and will
challenge the status quo in terms of what is now ongoing in the worldwide automotive industry. Mark and
I, with the best creativity of Europe and the Americas, we will create the good chemistry to make this new
company a true success. And I'm very confident that by joining forces, we'll bring a better future to our
employees, a better future to all the stakeholders involved with this new company.
Thank you for your attention. We can now move to the Q&A.
Joseph Veltri
Vice-President of Investor Relations
Alecio, I think you can start taking questions from the queue, please.
Question and Answer

Operator
[Operator Instructions] We will take our first question from the line of José Asumendi.
José Maria Asumendi
JP Morgan Chase & Co, Research Division
José Asumendi, JPMorgan. And congratulations on the deal. A couple of questions, please. The first one
on labor costs to sales ratio, maybe for Carlos. As you think about the labor costs to sales ratio of FCA in
Europe, what do you think is the potential for improvement in the coming years? And what do you think
are the biggest levers to improve this ratio to maybe a level where core PSA is? And the second question,
maybe for Mike. As we think about emissions in Europe and additional hurdles over the coming years, as
Carlos addressed, how easy or complicated is it for the Fiat and Jeep brand to leverage on PSA's multi-
energy platform and launch additional electric cars?
Carlos Tavares
Let me take the first question, José. From everything we have seen on public numbers, it is visible to
us that FCA is already a highly competitive company in terms of total labor costs against turnover on
a worldwide basis. And last year, FCA was ahead of PSA on this criteria. So we believe that we have a
combined entity, which will be, if not leading, perhaps top 2 or top 3 in the worldwide industry on this
matter. So we don't believe that there is -- I don't believe there is enormous potential on that matter.
I think we need to be smart in the way we are going to invest. We need to be smart in the way we are
going to buy. We need to be smart in the way we are going to share technology, technology bricks, and
make sure that we move ahead with a higher level of efficiency and effectiveness than our competitors.
But on specific total labor cost against turnover, I think both companies are already extremely competitive
on a worldwide basis.
Michael M. Manley
Thanks, Carlos. Thank you for the question. Firstly, let me start by talking about our compliance plan. As
we have said, our plans, if we were to stand-alone, were to begin bringing heavily electrified vehicles to
the market in volume from next year. But as I look out, our volume per platform was significantly below
the volume that we will be able to achieve as a merged company. Carlos talked about 2.8 million units and
3 million units across the B, C and D segment. And what that will mean for us collectively is driving down
those costs. So as I look out in the coming years, I think migration to PSA's platforms will be easy. And
what will come with that is a large proportion of the synergies that we have put in the EUR 3.7 billion. Now
when I say easy, obviously, it will take time. And we are in a part of the ramp-up in terms of compliance,
where time is not on anybody's side. So we will continue with a number of our plans to make sure that,
individually and collectively when we're together, that we do comply and then move as swiftly as possible
on to the converged platforms. So it is easy, but it does take time.
Operator
We will take our next question from the line of Kai Mueller from Bank of America.
BofA Merrill Lynch, Research Division
Congratulations on the transaction. As a first question, just to understand a little bit your long-term view
on the balance sheet. So you obviously showed the joint balance sheet, how you are positioning in terms
of net liquidity. Maybe for you, Carlos. As you grow the business, obviously, to a bigger -- become much
bigger in terms of revenue, what is a comfortable level in terms of liquidity you are running -- wanting
to run with, and especially in light of the dividends you're paying out to Peugeot shareholders and the
dividend that's getting paid out to FCA? And then maybe as a second question on the antitrust, you said
there's a lot of work to be done. I saw on the back of your presentation, a couple of slides on some of the
key areas and key models. Are there certain areas that you're most concerned about? And what would be
remedies that you'd be considering if those things turn out to be an issue?
Carlos Tavares
Well, thank you for the question. I don't feel that we have any concern in terms of antitrust. We have
reviewed this topic extensively with the teams from both sides. And we are very comfortable that we have
no problem on antitrust. Of course, we will remain open and flexible in mind to any question that would
be raised by the authorities. But as a starting point of this process, we are very, very comfortable. In
terms of what we would call net financial position of the newco, what would make us, I think, reasonably
comfortable is that we land at above EUR 9 billion for the newco, and this is possibly what would happen
looking at the public numbers that we can see today, either on the consensus or on the things which have
already been made public through the different guidances. So with EUR 9 billion, I think we would be in
good shape to face any uncertainty of this market.
And maybe just a follow-up, is that EUR 9 billion then a run rate you'd be comfortable with running in the
long-term as well? So anything in excess you could be paying out as dividend as well?
Carlos Tavares
I think you are a little bit ahead of me. Give me some time.
Operator
The next question comes from the line of Thomas Besson from Kepler Cheuvreux.
Thomas Besson
Kepler Cheuvreux, Research Division
It's Thomas Besson with Kepler Cheuvreux. I have a first question on the time to market for the first FCA
car that could come on the Peugeot platform. I understand Mike saying it's easy, but it takes time. But
basically, can you already start working now that you've signed the MoU and have a car that comes out,
say, in 2022? Or do you have to wait for the deal to close and have a car that comes out in '23 or '24? So
when is this first car coming out and helping, obviously, once the pooling agreement is eventually over?
That's the first question. The second question is that, with this transaction, clearly, you're becoming a
formidable player on mature markets. But you have some clear weakness in some emerging markets,
notably in China. Can you say a few words about what the intention is for China? Or is it something you're
still going to be working on? And finally, just a quick word on one aspect, Carlos, you were stressing. You
were stressing agility versus size. Now you're going for size, which I understand because of the constraints
you're facing this decade. But can you say a word about how you're going to handle this new bigger
company versus what you liked with a smaller one?
Michael M. Manley
Okay. I'm going to -- I think we're going to cut up those questions. I'm going to do the first one that you
asked. Obviously -- so let me roll back. As you know, with PSA, we've had a joint venture for many, many
years developing Ducato on our side and the van on PSA side. Even before we got into the discussions in
terms of the potential for a merger, we were discussing opportunities to use common platforms because
we recognized at that stage that, that was a way to transition over the next few years in the least capital
consumptive way. Projects that were started prior to our merger and merger discussions, we can continue
with. Anything else would fall under gun-jumping regulations, which would mean they would be parked
until the merger in and of itself is complete. So we're relatively clear on the things that we can work
on. And obviously, there are things that we can't work on. And that's what's guided how we believe the
synergies will come in. And even though I said it's easy, as you know, producing a vehicle is not the
easiest job in the world. But when I look at the success that PSA had with Opel, they produced the first
vehicle, I think, from Opel, I think it was 20 months, something like that, 21, 22 months, something like
that. So it shows you that with speed and, I think, the focus that you can actually converge on platforms
very quickly.
Carlos, why don't you answer the China one.

Carlos Tavares
Yes, that's a great one. Thank you very much. Well, it is fair to say that we didn't so far achieve big
success in China. And this is obviously a point that after the closing, we'll be discussing, Mike and I,
to make sure that we find out what is the diagnosis for the reasons why we are not achieving in China
as much as we would like to achieve. From there, we will leverage the size and the capabilities of this
enlarged company to bring to China, perhaps a more efficient way of doing business, which we so far
have not achieved. So this is still a homework to be done after the closing. So far, we can just recognize
what you said, Mr. Besson, which is that we are not achieving the results, at least on the PSA side that
we would like to achieve, and this is homework and the food for thought for the future. But of course,
this strategy will be a point for discussion and decision after the closing. So you rightly so mentioned,
Mr. Besson, the question about agility. You are absolutely right. Of course, size is not always the friend
of agility. Reversely, what we are now facing in terms of environment is the fact that we cannot just say
that having 0 emission vehicles on sale in the showrooms is going to be the solution to the expectations of
our citizens. We have those vehicles on sale. The citizens could buy, the customers could buy those cars.
But we understand, both you and us, that what the customers are going to ask us to deliver is not only
0 emission, it's not only clean mobility. They will ask for clean mobility of course, always safe, but also
affordable. And we need to make sure that if agility was only to come from the size, then the small size
could be a roadblock to achieve the volume scale effect that we need to deliver the affordable, safe and
clean mobility. So we have to find the appropriate size to be able to leverage volume scale effect in terms
of buying batteries, buying motors, buying electric components from one side. We need scale to be cost
competitive to deliver the affordable mobility and clean mobility that the customers expect. But that's a
matter of size. We also need some size to dilute the R&D costs to face the technology challenges that we
have ahead of us. And on the other side, we do not want to lose the agility that FCA has demonstrated
and PSA have demonstrated so far by being, what we would call, a midsized car company. So of course,
that means that we will have to make specific work on how we increase the autonomy, the delegation
of authority of the top executives who are leading business flows in the company, meaning the regions.
And we'll have to make sure that they have the delegation of authority, they have the capability to
bring around them a number of top executives who have the business skills that are needed to drive the
business as close as possible from the front line so that the agility will be expressed within the regions
because the business will be driven from the front line and not only from the headquarters. This is
something which is, of course, still food for thought. It's a point that we will discuss with Mike in a timely
way. It is something that is not decided, something that is not still very clear in everybody's mind. But of
course, combining agility by running the business as close as possible from the front line to protect agility
from one side, and from the other side, leveraging the scale in order to be cost competitive in buying the
kilowatt hours and making sure that we deliver to the consumers affordable, safe and clean mobility. I
think this is where we have the right balance that still needs to be worked out.
Operator
We will take our next question from the line of Patrick Hummel from UBS.
Patrick Hummel
UBS Investment Bank, Research Division
It's Patrick from UBS. A couple of questions, please. The first one regarding your statement about the
net cash flow. You said it's going to be positive, the impact from the merger from year 1, which I think
is quite unusual also in light of the pretty high implementation costs that come along with a merger. Can
you be a bit more granular what the first year savings actually will be? Is it going to be predominantly
driven by overhead cost reductions? Is it the purchasing where you think you're going to have a very
immediate positive effect? Or what makes you so confident to say that you're going to be free cash flow
or net cash flow positive in terms of the synergies in year 1 already? And second, just to clarify. For the
CO2 compliance period, 2020, 2021 in Europe, are you going to sign a pooling agreement even for those
2 years? Or will the pooling of PSA and FCA emissions just start after that compliance period? And very
lastly, on the capacity situation in Europe, you're ruling out plant closures as part of the merger. Yet, I
think, in particular, on the FCA side, there has been some excess capacity in the market. So what are your
plans with that capacity? Are you -- have you identified gaps in the product portfolio that you now think
you can better fill thanks to the availability of each of these platforms? Or what are you thinking about
that?
Carlos Tavares
Thank you for your questions. I'll take the first one, and Mike will take the other ones. For the first one,
the answer is quite simple. As soon as the closing is delivered, we have a very clear vision from the
work that has been done so far on synergies, how much cost avoidance in terms of R&D and CapEx we'll
be able to deliver by crossing the capabilities of both companies. It is quite clear that there are many
things that we can share. There are many assets that we can share in terms of powertrains, in terms of
platforms, in terms of things that if we share, we immediately generate a very significant cost saving for
the other company. And this is the reason why, in terms of R&D and CapEx, the cost avoidance on the
first year can be cash positive because we can share immediately many, many things, which represent the
complementarity that we have with the assets of both companies. So that's the reason why from year 1,
we can be cash positive. Mike?
Michael M. Manley
Thank you. In the pooling agreement, I said on one of our quarterly calls that we have pooling agreements
that go through to the end of 2021, and it was matched with FCA's stand-alone product cadence for our
electrified vehicles and a penetration into the marketplace that we felt we could achieve with that so that
pooling agreement will stay in place through 2021. And I've described it, frankly, in the past as a hedge
because, as you know, we will begin even next year to bring on our heavily electrified vehicles. I think you
then ended up on excess capacity.
You're right, for FCA, utilization in our European plants has been a weakness for us. We've worked very
hard and I think incredibly well with our unions to manage it. We know from the product plan that we have
developed that, that utilization would reach competitive levels compared to our European peers as we got
into 2022, 2023, in particular. What I think the merger gives us an opportunity to do, in some instances,
is, a, accelerate those plans once we get to the merger itself; and b, achieve those plans with much better
efficiency in terms of CapEx. But we're confident when we look at the overall capacity in Europe that we
will be able to not just reach, but maintain competitive utilization levels, which is why we made the joint
statement we did in terms of plants. And as Carlos said, this is a merger of 2 healthy, well-performing
businesses that have opportunities no doubt, but are not coming at this in terms of a crisis, which is why I
think this is an ideal opportunity and time for us to merge.
Patrick Hummel
UBS Investment Bank, Research Division
Mike, just one follow-up on the pooling agreement. My question was not so much on the Tesla pooling
agreement, but basically, the pooling between PSA and FCA going forward. Is there any benefit from
pooling right away before actually the newco starts? Because I think it wouldn't be an issue to file at the
EU for pooling of PSA and FCA already today?
Michael M. Manley
No, I agree. I think, you're right. I'm sorry, I did misunderstand your question. I think when you look at
the plans for stand-alone, PSA and FCA, as Carlos mentioned, certainly, I see from FCA, a very robust
plan going through that time period. PSA, now Carlos would say he sees a very robust plan. You're already
seeing significant electrified vehicles in the marketplace. If there's opportunity or need for us to pool,
then, of course, we can take advantage of that. But the good news is because there will be a delay before
we can get that convergence on platforms that we have, both of us have solid plans that will not require
pooling, but it gives us yet another option should we need to, so more flexibility, which is always a good
thing as you go into what could be uncertain times.
Operator
We will now take our next question from the line of Max Warburton from Bernstein.
Max Eliot Adair Warburton
Sanford C. Bernstein & Co., LLC., Research Division
Congratulations from my side, too. There's something satisfying and gratifying about things deal happen
given both sides so much wanted to do something like this, so all the best of luck for the next stages. 2
questions from my side, please. Mike earlier mentioned this term gun jumping in terms of some of the
limitations around what you can do together before the deal closes. Could you just talk about that a little
bit more? Are you able to do enough due diligence? Are you able to get into the data in sufficient detail
to know exactly what you want to do once the deal closes? Is it -- from an information point of view, are
there any limits on what you can explore? Are there limitations just really on actually getting stuff done
together like a joint platform, as mentioned earlier? And then the second question, Carlos, is it too early
for us to ask you for your thoughts on Fiat in Europe? You've turned around 2 European businesses. How
does Fiat compare to what you found and had to do at Peugeot and Opel?
Michael M. Manley
Thank you, Max. I'll respond to the first one, while Carlos contemplates the second one. So I'm buying you
time already, Carlos.
Carlos Tavares
Thank you, Mike.
Michael M. Manley
You're welcome.
Carlos Tavares
You're very kind. Thank you. I appreciate that.
Michael M. Manley
The gun jumping rules, that -- so diligence in terms of putting together the plans is separate from actually
acting as if you're one company before you are one company, which usually comes after the diligence. The
establishment of very robust clean rooms, for example, enables a few number of people to carry out the
diligence as well as looking at the integration planning. And that was fundamental to underpin the initial
assumptions that were done at a much more high level. And that was really the work that the teams did
over the last weeks and months. And as you can imagine, there was a huge amount of work to validate
the top line assumptions, make sure that it was achievable. So on the gun jumping side, any project that
really had been started before, we can continue. But what we cannot do between now and close, as you
know, Max and apologies, you probably know this better than me, what we cannot do is act as one entity
on a, for example, a new project going forward. So the teams and us are very, very clear on what we can
do. And that is, in fact, fed into the timing that we have assessed for how those synergies will accrue to
the merged company.
Carlos Tavares
Thank you, Mike. Good afternoon, Max, and thank you for your questions. Well, your second question is,
as you know, we're a little bit ahead of time, but I could share with you a couple of thoughts from what
I've already seen. The first one is that as we are both car addicts and brand addicts, we know that the
FCA brands in Europe are extremely rooted in Europe. They are rooted, and that's important that we
understand that we have this deep roots in terms of passion for these products and passion for these
brands. And when we have this kind of situation, it means there is a big ground to leverage these roots in
Italy and these roots to make these brands even more enjoyable for the future. So I'm very comfortable
with the history, very comfortable with the roots, very comfortable with the passion and the talent of
the people I have so far met, and this is a very good starting point. From the other side, we are going
to have a very significant, if I may say, a very significant tailwind. The tailwind is named electrification.
Electrification is going to bring us to a level of commonalities and a level of cost efficiencies related to
the volumes per platform, the volumes per component with electrified products in Europe, which will
represent for us a very strong competitiveness factor because, as you know, the size of PSA plus FCA
in Europe is going to be significant, certainly not at the level of our German competitor, but not very far
from that. And the fact that we are going to join forces means that the volumes per platform, the volumes
per component, the amount of kilowatt hours that we are going to buy, are going to be significant to
deliver a volume scale effect that ensures cost competitiveness against our peers. So you see, we have 2
different sides of the same reality. One side is the supply side, on the cost of electrified components and
platforms. And this is going to benefit from the volume scale effect of the combined entities. And from
the other side, we have, of course, the history, the roots of the Italian brands, which, of course, express
a lot of passion, a lot of emotion and when there is passion and emotion, there is room to continue to
work on the marketing communications to make sure that at one point in time, we have the capability to
improve the situation. So I'm very confident. Of course, many things have already been done, I believe,
and Mike mentioned that, of course, which means that we are on a rolling start, and possibly, we'll be able
to bring a few more ideas based on our own experience. And this is what makes this merger really exciting
because we see that there is a lot of business sense, business focus from the 2 companies. They were
both able to turn around themselves. They both have the level of maturity to understand that it's better
to face the challenges of the future together than on a stand-alone basis. And by joining forces, all of this
experience all of this passion combined will deliver, I'm very sure even better results. That's what we can
say, Max, on this matter right now.
Operator
We will now take our next question from the line of Adam Jonas from Morgan Stanley.
Adam Michael Jonas
Hey, Carlos and Mike, so really thanks for the call, it's an absolutely historic, very, very interesting call,
a lot of like guys in here and what's going on in the industry. A couple of questions for you. If I were to
ask you, kind of once you close, what will you be spending more money on kind of CapEx and R&D over
the next 5 years, kind of T plus 5 from closing? If I gave you a choice between internal combustion and
battery electric vehicle as just 2 categories, what do you expect to spend more on between those 2?
Michael M. Manley
Okay. Adam, this is Mike. So the answer to that question, you really have to look at what has already
been spent in terms of CapEx and the R&D. FCA have just finished launching all of our next-generation
combustion engines with our GME and our GSE, and they are now being actively rolled out. The future, of
course, it is beyond out is higher and higher levels of electrification. It is connectivity and it is autonomy.
And those are the elements that will increasingly allow you to win or not win in the marketplace. So as we
move forward, given that we have already highly efficient, small displacement combustion engines, we
have a series between the group of exceptional transmissions, it's going to be the future technology that I
think the investment will need to be targeted towards.
Adam Michael Jonas
Okay. Carlos, can I steer one towards you. There seems to be a real dichotomy between auto companies
on how they approach electrification. On one side, you got folks like GM and Volkswagen that have either
eliminated hybrids or are about to. And their view is, capital is expensive. They don't want to try to do
everything for everybody. They want to skate to where the puck is going -- sorry, that's a hockey analogy
and I don't expect you to really follow that, but you get the point, probably you might get that, you live
in Detroit. So you have this kind of -- some folks going after the hybrid thing, which, if I'm being blunt,
is super complex, expensive and kind of continues. Well, I might have a point, of continuous complexity
whereas EVs are just so simple. I'm just curious where you come out on the spectrum? Are you on the
Toyota side where hybrids are amazing? Or are you on the kind of Volkswagen, GM side, which is we need
to go where the industry is really going? How do you place your view on that?
Carlos Tavares
Well, let me try and answer to this sophisticated question. One thing we should not forget all of us is that
we have customers and they decide at the end of the day. Of course, we have to comply with the CAFE
regulations in terms of overall CO2 emission performance for the mix of cells. And that means that we
need to bring technology bricks to the market being PHEVs, MHEVs, BEVs of the world and highly efficient
ICs. All of this needs to be on the table for a competitive global car company nowadays. This is exactly
what we have. By combining the strength of the 2 companies, we have all of those technology bricks on
the table, which means that from now, we will have to build the most efficient menu to ensure that we
have a highly CAFE compliant cells. This is, of course, on the table. This is what we are going to improve
even further after the closing of the company. Right now, what you can see is that the PHEVs of the
world, they are bringing you the best of different worlds. They bring you the capability to be 0 emission
downtown. They bring you the capability to have a significant range of the products, if you want to have
longer trips. They gave you the capability to be 4-wheel drive with low emissions. So all of this is what I
would call technology that is in our hands, and that it is something that, of course, we will be using in the
future because people are ready to pay for a 4-wheel drive capability, low-emission with significant range,
and 0 emission range in urban areas, so all of this is something that the customers are willing to pay.
On the other side, if you want to have a 0 emission capability with a long range, that is also a possibility.
It will need a specific engineering. It's a possibility that we are not discarding. It is highly dependent on
the competitiveness of your battery buying. If you don't have good competitiveness in battery buying,
then this is going to be difficult in the future, but it's also a possibility. And of course, all the intermediate
technology steps are possible. And what we can observe both of us is that right now, if you combine the
technology strength of the FCA and the technology strength of PSA, all of this technology bricks are on the
table.
Adam Michael Jonas
Mike, just one last quick one for you. Mike, we've noticed that the ticker symbol jeep, that is j-e-e-p is not
used by any entity to our knowledge. This is a serious question. Can you confirm whether you have the
rights to that ticker symbol? That's my final question.
Michael M. Manley
Adam, I can't confirm whether I have the right to that ticker symbol. I'm just trying to work out, even if I
did, would I want to use it?
Adam Michael Jonas

That's what we're trying to figure out, too.
Michael M. Manley
Yes. Well, maybe we should have a couple of coffee and talk about it.
Operator
We will now take our next question from the line of Gaetan Toulemonde from DB.
Gaetan Toulemonde
Deutsche Bank AG, Research Division
It's Gaetan, Deutsche Bank speaking. I will have only one question. Regarding the restructuring, you
mentioned EUR 2.8 billion spread out over the next few years. Can you be a little bit more specific about
that number? Will it be more back-end loaded, front-end loaded, is equity shared between the 2 group and
explain a little bit more what is behind that number? That's my only question.
Carlos Tavares
Gaetan, well, first of all, we'll make sure that we reduce that number. That's the most important thing is
to reduce the number. That's point number one. Point number 2, of course, we will make sure that we can
backload it if we can. And point number 3, it is also something that we have in our hands to be able to
adapt all the manufacturing processes of the 2 companies to be flexible in terms of manufacturing, making
sure that we can have a manufacturing footprint that is flexible, in support of the business of the different
brands of the new entity. Of course, we may have things related also to R&D that needed to be taken into
consideration. Integration costs in terms of IT systems, making sure that the companies can have a flow
of information, which is flawless and very fluid across the different functions and different regions; some
transaction fees and some also additional fees in terms of financial services. So this is all we have. Of
course, as you may know, from one side, we'll try to improve the scope of synergies because it is quite
amazing to see how creative our cross-company teams have been. And even after we have concluded
that EUR 3.7 billion was the right number, we see that the flow of ideas is still there, and our people are
coming back to Mike and myself with additional ideas. And on the other side, even though we have to take
into consideration a certain amount for implementation costs you know that we are always, like, looking
for more efficiencies, and we'll try to reduce those amounts. So that's where we are right now, and we'll
tell you more after the closing because after the closing, we'll be much more concrete and pragmatic
about the things that we intend to do.
Gaetan Toulemonde
Deutsche Bank AG, Research Division
Okay. Maybe one little point. Is it more back-end loaded or front-end loaded? And is it relatively equally
shared between the 2 company? And when you refer about the synergies I mean, I remember some
notion of cost avoidance. We talk about real synergy. We don't talk about cost avoidance is the number
you mentioned. Is that correct?
Carlos Tavares
In our sense, we talk about cost avoidance is a clear synergy because you are avoiding an investment to
1 of the 2 companies. So it's a clear synergy by sharing assets between the 2 companies. To your first
question, I would like to highlight just 2 things. First of all, we were saying that we would be cash positive
from year 1 on the synergy plan. So this is a piece of information for you. And the second information is
that by year 4, we would have delivered no less than 80% of the total amount of synergies as a run rate
at EUR 3.7 billion. So these 2 points are giving you a hint about the pace of delivery that we intend to do.
Operator
Our next question comes from Stephen Reitman from Societe Generale.
Societe Generale Cross Asset Research
Hello, yes. Hello, can you hear me? Can you hear me?
Operator
We can hear you now. Go ahead.
Yes. So it's 2 questions. On Slide 18, you talked about the platform volumes, the 3 million on the compact,
mid-size and the over 2.6 million on the small. I think it's -- we all understand the major profit pool for
PSA is Europe and the major profit pool for FCA is North America. And I think it's quite -- we understand
really where those product synergies are coming from in Europe and maybe Latin America. Do you
think PSA has much to offer the North American operations of FCA in terms of platforms and the like,
considering the -- where the profits are coming from at the moment for FCA from Ram and from Jeep?
And secondly, my second question is regarding Comau. Can you talk me through at least the thinking
behind the decision to distribute the proceeds from Comau to be now to the Dutch company to the new
merged group rather than to FCA shareholders prior to the merger?
Michael M. Manley
Stephen, this is Mike. In answer to your question, there are always things that can be contributed into
North America from the merger of the company. Let me start with one of our most important assets, and
that's the people that we have in the organization. You have 2 organizations that have had, as we've
said in the past, near death experiences and they've learned not only to thrive but they've learned to do
it in incredibly competitive time. So the movement of people into a global company around the world,
for me, is a huge asset that we always underestimate, and I'm looking forward to joining the cultures
and merging the cultures quickly in that way. Then when I think about the electrification, for example,
the whole platform is no, because the platform profile is very different, but components, of course. The
electric drive units, for example, control units, even battery cells, can be used and utilized in many, many
vehicles, as can developments, for example, in autonomous driving or connectivity. So it's not necessarily
apparent on the surface, if you purely look at platform sizes. But there is a lot of opportunity that I think
can be accrued, some of which is reflected in, for example, the purchasing synergies that we've talked
about. But there's much more to do. And as Carlos said, our teams, our collective teams constantly and
continue to roll up ideas. So I like to think of this as a minimum hurdle that Carlos and my job is to get
over as soon as possible and deliver even more.
In terms of Comau, obviously, some time ago, we had a view, and we went through the normal process of
due diligence to finalize the view that we felt was fair and reasonable to both sets of shareholders. And I
think we ended up at the right place. Obviously, I will not go through and regurgitate all of the weeks and
the work that was done in between. But clearly, with unanimous from both Boards of Directors, our Board
of Directors also feel we ended up at the right place.
If I could just ask also, PSA obviously had ambitions to reenter the North American market before the
merger was announced. Does the merger satisfy PSA's ambitions in the sense that it now has a very
full presence in North America? Or do you think there's still further room for PSA brand to be sold in the
United States?
Carlos Tavares

Well, for the time being, we see the strength of FCA in North America, which is outstanding. And of
course, we have 12 months ahead of us to think about what we would do after the closing. So, so far it's
premature with my apologies to answer your question. But of course, this is something that we will have
to consider, and the decision will be made at closing. Of course, we all recognize that FCA is not only a
big player in North America, but also a highly profitable player in North America. And this is also a big
reason for the combination of these 2 companies. I would like just to add to the previous question also
that, as Mike mentioned, if the emission regulations were to become more stringent in the U.S. market, of
course, all the electrification know-how technology bricks components that we would have developed for
the European market would be a very significant asset to bring to the U.S. market, the appropriate level of
improvement. So all of this is also part of the potential of this new company by being able to move from
one region to the other region the technology bricks that allow us to be not only compliant, but highly
competitive, always in the same direction, safe, clean and affordable mobility.
Operator
Our final question will come from the line of John Murphy from Bank of America.
John Joseph Murphy
Just a first question in the context of the synergies with the commitment to maintain plants and
headcount in Europe, given what's going on with powertrains over time, is there any possibility for in-
sourcing of more parts of the vehicle, particularly around the powertrains? And if you'd also think about
these cost savings, how much of your synergy number is a net number? And how much will be reinvested
in future tech?
Carlos Tavares
Well, it's a great question. We have been strategically thinking about this and this is a topic that still
needs more discussion with Mike and the FCA team. So far, on the PSA side, we have been taking a very
clear stance in a vertical integration of a certain number of electrified components. We have created a
JV to engineer and to manufacture electric motors. We have been doing the same thing for automatic
transmissions, electrified automatic transmissions. We are manufacturing our own battery packs. We are
in the project of the European battery supplier that has been now authorized by the European Union.
So all of this demonstrates that we believe that at one point in time, it is important that we control the
competitiveness of the electrified powertrains. That's where we started. All of this needs to be discussed,
of course, with Mike and the FCA team, can be challenged, can be changed. Everything is open. But it is
also, to a certain extent, the capability that we have to be in control of the performance competitiveness
of the electrified powertrains. And at the same time, by combining the volumes of the 2 companies, we
can have a high level of cost competitiveness also to be in a situation to challenge some of our peers. And
again, we cannot talk anymore about clean mobility without talking at the same time about affordable
mobility. Clean mobility is not going to be enough because if clean mobility, as we all know, is expensive
mobility, then expensive mobility will not be something that will meet the expectations of all the customers
we have right now. So we need to add to clean mobility the affordability dimension, which will come from
volume scale effect, which will come eventually from being able to control the technology, both on the
scientific side of the technology, on the manufacturing side of the technology, on the supply chain side
of the technology. So this is all about the cost competitiveness of the supply side of the business flow.
And of course, this is open for discussion. Nothing is now completely locked, but I think it's also a very
timely moment for this merger decision because with the acceleration that we can anticipate on the CO2
emission targets, this is the moment where for 2030, some very significant decisions need to be made,
and I'm very happy that this merger is happening right now because we are in the right time window to
make those decisions, and that will benefit both companies by 2025 and by 2030. So that's what I would
share with you today.
John Joseph Murphy

And it's fair to say that EUR 3.7 billion target for synergies is a net number? Or is that something that
could end up getting reinvested into this new technology that's still TBD?
Carlos Tavares
You may consider that the synergies are a net number.
John Joseph Murphy
Okay. And then just lastly, I mean, one of the things that you had question and struggled with as a whole
in the portfolio is a lack of a captive Finco. The combined entity, is there an opportunity, maybe even for
both companies to really ramp that up and plug that hole because that's one thing that people typically
look at as a core part of global OEM these days.
Michael M. Manley
This is Mike. As you know, from the number of the presentations that we have given, we think that, that
the right time a captive Finco, particularly in North America, it can be a very strong asset for the group.
We have arrangements in EMEA, for example, in FCA as well as in PSA that are equally working very well
at this moment in time with our joint venture partners. So I would say that's something that also requires
some further detailed thought as the 2 companies come together. But at the appropriate time, it's proven,
I think, that a very strong captive is an asset, but not everything is solved now and many things we need
to work our way through.
John Joseph Murphy
Mike, it's fair to say that in all the synergies and opportunities, that's not something that you've outlined
that anything you're showing the folks and that may be something that'll add quite materially to that
combination, is that a fair statement?
Michael M. Manley
John, that would be -- that's a fair statement, they'd be absolutely incremental to everything that we've
put in. We have very, very few synergy effects from our currently 3 partnerships for Finco.
Operator
That will conclude our question-and-answer session. I would now like to turn the call back over to Mike
Manley and Carlos Tavares for closing remarks.
Michael M. Manley
So I will go first. Firstly, thank you for making the call today. Obviously, it's a very special day from our
perspective. As you all know, FCA has long felt that smart combinations, mergers in our industry not only
are beneficial, but as we approach some of the challenges in the future, they are also necessary. And we
have been, I think, very, very vocal on this point. I believe that this of all of the opportunities out there for
us, now we've had time to fully explore is absolutely the right thing. And it will enable us to certainly use
capital much more efficiently; I think return better value to our shareholders and all of the things that we
have learned as a company since 2009 and the journey that we have been on. And I'm sure, very similar
for Carlos from 2013, we'll now be able to pool our collective knowledge and the track record that both
organizations have been able to build up and I think create something very special. Many of you on the
call have followed FCA throughout this whole period, and been around and part of the transition. For me,
despite the fact that I don't like all of the questions sometimes, you've been as much of the journey. So
I hope you're looking forward to the next phase of our journey as much as I am and all of our people. So
from my perspective, it's a good day, but it is a start. And again, thank you for your time.
Carlos Tavares
Mike's comments are absolutely on the spot. I have nothing to add. I share everything and support
everything he said. I just would like to share with you the fact that this is going to be thrilling. This
is going to be exciting. This is going to be once-in-a-lifetime opportunity, and I'm really looking
forward to support the creation of this merged company. I think the potential is obvious. Geographical
complementarity, technology complementarity, a lot of execution capability from both sides. We are
competitors. We love competition. We are ready for the fight. And let's move on. Thank you.
Operator
That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you
may now disconnect.
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2 - MA Call - FCA - PSA - 18dec2019

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Fiat Chrysler Automobiles N.V.

Call Participants .................................................................................. 3

Question and Answer .................................................................................. 9

Adam Michael Jonas

José Maria Asumendi

Kai Alexander Mueller

Max Eliot Adair Warburton

Stephen Michael Reitman

With that, I'll hand back to Carlos.

Question and Answer

Carlos, why don't you answer the China one.

Morgan Stanley, Research Division

Chairman of the Managing Board

BofA Merrill Lynch, Research Division

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